Today, we are going to see how you can make lots of money with the stock market.
Or how to fish a shark with a box of maggots… How to make lots of money with the stock market is what you gonna learn here.
If you want to succeed in fishing for a shark when all you have is a box of maggots, these are the options you have:
- Make a big ball of maggots, put it at the end of your line and hope that the shark is interested in this SUPER bait! You can imagine that this solution has really … really little chance of working …
Use maggots to fish for sardines and make a stock. Then use these as bait to catch larger fish and so on until you have several fish interesting enough to bait the shark. With this solution, you will have to be patient, but it is the one that is most likely to succeed.
It also has a huge advantage! You will progress little by little and you will gain a lot of experience. You will, therefore, have all the chances on your side when the time comes when the shark is at the end of your line!
- Finally, you can burn the stages by buying directly the bait necessary to catch the shark. You are therefore more lucky than the beast bites but you may pay for your lack of experience. Indeed, how will you manage a shark at the end of your rod when you have never fished?
We can easily draw a parallel with good portfolio management on the stock market which will pay off in the long term.
- The maggot box is your starting capital. It is an amount that you risk and that you accept to lose if it goes wrong. Losing this capital should never put you in a bad situation. You have understood that you must not directly risk all your capital to hope to hit the jackpot as soon as possible. Make no mistake, you are much more likely to lose everything.
So you are going to fish for sardines Winking smile. You are actually going to risk small parts of your capital to try to make small gains (the sardines). If all goes well, your capital will gradually increase and you will be able to make bigger and bigger gains. You will also gain experience.
Finally, it may be that the starting capital that you can put in is much more substantial and immediately allows you to make substantial gains. The problem with trading directly with this large amount is that you will pay for your lack of experience if you have never traded. And it can cost you relatively expensive…
The stock market is like fishing
We can find several similarities between the stock market and fishing, it is for this reason that I make the parallel with the fact of fishing for a shark with a box of maggots. Fishing being a fairly popular activity, I think that the image simplifies the procedure to go from a small capital to a fortune.
- To catch a big fish, you need the right bait. Indeed, we do not catch a shark with maggots. If you want to have a chance to hook one, you have to have a bait that is interesting for him. It is exactly the same principle with the stock market, one cannot earn a living with 500 euros of capital.
However, this starting amount is still a good start and may grow over time. It will take a lot of patience to arrive at having a substantial sum but it is entirely feasible.
- Several baits are needed. No fisherman goes to sea to catch a shark with the only bit of a tuna carcass. You can imagine that there is a good chance that the shark will not bite the first time or even, will drop out and go with its meal.
It’s the same principle on the stock market, you should never have a single chance to win, otherwise, it’s from the casino. You have to divide your capital to be able to collect enough losses so as not to end up with nothing. Your capital is your bait box.
- It takes patience. When a fisherman throws his line into the water, he must wait for it to bite. He must, however, remain focused on the shoe at the right time at the risk of missing his catch.
When you trade, you have to be like this fisherman, stay alert to what’s going on and wait for the right time to shoe! And if you missed the key, don’t panic, wait for the next one. The trades are like fish in the ocean, there are plenty!
What you must remember
I hope that the parallel between the stock market and fishing has spoken to you. Managing your capital on the stock market is like managing a bait box.
The size of the catch will, therefore, be directly linked to the size of the bait. You will have to be patient, but if everything goes well and you manage your stock well, you will have bigger and bigger catches over time.
I hope you enjoyed this article and I invite you to ask me your questions in the comments. I will answer it with great pleasure.
Thank you for reading How to make lots of money with the stock market.